Strengthen pharma IP to bolster innovation, two new reports say

Canada must strengthen its pharmaceutical intellectual property protection in order to spur investment and innovation, argue two papers released by the Macdonald-Laurier Institute on Tuesday.

“The role of patents, and intellectual property in general, in the pharmaceutical sector, is one of the more contentious policy areas in economics,” begins health economist Brian Ferguson, a professor at Guelph university.

“Depending on one’s point of view, pharmaceutical patents are either absolutely essential for the advancement of research or they are the major obstacle to making life-saving drugs available where they are most needed.”

This innovation versus expense argument is one that drew a great deal of attention in the context of the Canada-EU CETA negotiations last fall.

Ferguson’s paper, “The Role of Patents: A Primer”, and Colorado College’s professor Kristina Lybecker’s “Intellectual Property Law and the Pharmaceutical Industry: An Analysis of the Canadian Framework”, are the latest two to delve into the complex debate.

In his analysis of the EU’s proposals, Ferguson discusses patent extensions and data exclusivity.

He sees patent extension as reasonable when unusually long approval processes delay a drug coming to market.

On data exclusivity, however, he’s less clear.

Data exclusivity relates to the requirement that a generic drug be demonstrated to be safe and effective, Ferguson writes. And since the generic drug is the bio-equivalent to the brand-name drug, this is normally just a matter of citing the latter’s original data.

Often, though, he maintains, it’s used re-enforce weak patents.

As part of the CETA negotiations, the EU has asked Canada to extend its period of exclusivity from 8 to 10 years.

On one hand, Ferguson argues there’s no “good justification for creating a second mechanism for protecting market position,” on the other, he suggests it could provide “an incentive for research-based pharmaceutical companies to investigate new uses of older, especially out-of-patent, drugs.”

In her paper, Lybecker begins by addressing the extremely contested estimated cost of bringing a new drug to market.

Citing a 2007 study, she offers the unusually high estimated cost of $1.3 billion — most other estimates range between $800 million and $1 billion — but goes on to say that the exact number is less important than acknowledging that the process is lengthy and expensive.

“Regardless of the extent of overestimation or underestimation of the cost of pharmaceutical research and development, it is a tremendously costly endeavour. Innovation is essential to the industry and the source of both profits and growth,” she writes.

As a result, she says, patent protection is more important to ensuring returns in the pharmaceutical industry “than virtually any other.”

The Colorado College professor analyses the differences in pharmaceutical IP protection across the seven regions with the highest level of pharmaceutical research and development spending.

Her analysis leads her to four recommendations to “strengthen Canada’s legal architecture for intellectual property protection and encourage pharmaceutical innovation in the country.”

She offers more bullish support for data exclusivity and patent term extension than Ferguson.

“Strengthening data exclusivity laws will give innovative firms the incentives to produce the data required for regulatory approval,” she explains.

Lybecker’s other two recommendations call for orphan drug legislation and strengthened anti-counterfeiting legislation.

The first, which already exists in the United States, Japan, Australia, and the EU, “would define a ‘rare disease’ and incentivize Canadian firms to intensify their research and develop efforts to discover new therapies for these diseases,” she writes.

The second “would more closely align Canada with the Council of Europe which recently adopted the ‘Medicrime’ Convention on pharmaceutical counterfeiting and similar crimes involving threats to public health.”